In 1997/1998 activities in this core project were focused on i) validation of the DMol/COSMO program and ii) supporting use of the program at SDSC. i) Several validation projects were accomplished and results were presented as invited contributions at major international conferences. The influence of solvent on structures and relative energies of various conformers such as betaines and sulfobetaines, ethers, carboxylic acids, aldehydes and ketones was studied using the DMol/COSMO model. Organic reactions including: dipolar cycloadditions, parent Diels-Alder reactions, keto-enol tautomerism, ring opening of cyclobutene, proton exchange in amides and radical addition reactions were studied. The effect of solvent on the transition state and enthalpy of reactions was elucidated. In some cases it was found necessary to include the water molecules explicitly in quantum calculations, while the remaining solvent was represented as a dielectric continuum. Dmol/COSMO approach was used to evaluate the free energies of hydration for over 150 small to medium size molecules, cations and anions. A significant validation study of DMol/COSMO method augmented with the COSMO-RS model was done. Results of vapor pressure, surface tension, partition coefficients for over 200 molecules demonstrate a practical utility of the DMol/COSMO/COSMO-RS model. ii) The DMol/COSMO methodology was presented at an SDSC workshop. Collaboration with personnel of SDSC was enhanced. In particular, support in using DMol/COSMO program was provided to Drs. Igor Tsigelny and Lynn Ten Eyck in their research on conformations of methylphosphonothioates. As a first step, the optimized structures of 6 organophosphonate pairs, were calculated using DMol/COSMO program in gas phase and in water. Relative energies of conformers were found and the charge distribution due to the solvent effects was calculated. Further calculations are planned to estimate the transition states of such OP reactions with active serine of AchE and other esterases.